The Strength of Nations Project seeks to light the way to a brighter future and ease suffering, though study of what sensible policy is and why, and organized action to effect policy reform where needed.
The project welcomes the collaboration of individuals and organizations sharing this goal.
This site organizes information about our thinking and policy initiatives.
Our policy is directed not against any country or doctrine but against hunger, poverty, desperation and chaos. -George Marshall, 1947 June 4, quoted by Ronald Reagan at the Brandenburg Gate, 1987 June 12.
Bad men need nothing more to compass their ends, than that good men should look on and do nothing. -John Stuart Mill, University of St. Andrews, 1867. We are not among those idle souls. -Appearing after Mill's quote on the back of a t-shirt.
- 1 An Inquiry Into the Nature and Causes of the Strength of Nations
- 1.1 Economics: Nature Rewards Organized Cooperation and Intelligent Allocation of Resources
- 1.1.1 Capital
- 1.1.2 Organized Cooperation
- 1.1.3 ROI and Concentration of Wealth
- 1.1.4 (Thermodynamic) Irreversibility
- 1.1.5 The Rising Challenge of Ecological Sustainability
- 1.1.6 People (mostly) behave rationally and in response to economic circumstances and incentives
- 1.2 Sociological and Political Factors
- 1.2.1 Literacy and Education
- 1.2.2 Coherence
- 1.2.3 Cultural Willingness to Set Policy Pragmatically vs. Upon Traditional Views or Emotional Reactions to Events
- 1.2.4 Leadership
- 1.2.5 Economic Policy
- 1.2.6 Freedom
- 1.2.7 Political System Design and Balance of Power
- 1.1 Economics: Nature Rewards Organized Cooperation and Intelligent Allocation of Resources
- 2 Policy Lessons, Experiments, and Questions
- 2.1 Literacy and Knowledge
- 2.2 Political System Design
- 2.3 Economics
- 2.3.1 Taxation
- 2.3.2 Fair Trade not Free Trade Among All Nations, with Tariffs not Tax Breaks to Level the Playing Field on a Country-by-country and Market-by-market Basis
- 18.104.22.168 150 Years of the U.S. Powering Up its Economy While Raking In Tariff Revenues Show Protectionism and Trade Not Mutually Exclusive
- 22.214.171.124 Free trade without regard to labor and environmental standards creates a "race to the bottom" by rewarding low (or no) standards
- 126.96.36.199 The race to the bottom debases the economies that are humanity's strongest chance against existential threats like disease
- 2.4 Individual Behavior, Freedom, Easing Suffering, and Promoting Human Rights
- 3 Policy Operations
- 4 Operational Manual for Construction of Civilization Out of Ignorance in the Jungle
- 5 Organizational Persistence
An Inquiry Into the Nature and Causes of the Strength of Nations
Economics: Nature Rewards Organized Cooperation and Intelligent Allocation of Resources
So does warfare. These are the causal roots of civilization.
Capital is (1) a persistent resource that (2) allows you to produce or maintain more value with the same mount of time/labor, or the same amount of value with less time/labor.
Think of how much food 1 farmer grows with ancient stone tools vs. a modern combine.
Both the stone tools and the combine are capital, but the combine is a far more powerful piece of capital.
Preserved knowledge is also a form of capital. Think of the economic cost of building a radio or manufacturing penicillin, given the knowledge people have accumulated over the centuries, vs. if you had to start from scratch knowing nothing about science except that such devices and chemicals were possible.
Because of the technological complexity involved in producing more powerful capital, it takes the organized cooperation of many people to create everything that sustains and advances humanity's conditions of living. How many people did it take to design, build, deliver, and fuel the farmer's combine? To design and build and operate the factory that build the combine and the refinery that made the fuel? To design and build and operate the railways and roads and ships and that carried everything everywhere?
ROI and Concentration of Wealth
Because capital allows the production of more value with the same amount of labor/time, wealth naturally tends to concentrate with the owners of capital.
The farmer who farms with a combine probably makes more money from growing more food, than the one farming with ancient stone tools.
"It takes money to make money."
Correctly recognized at least as far back as Marx.
This line of thought assumes however that capital is wisely employed to produce value. It is economically possible, although foolish, for example for the farmer to set his combine on fire instead of farming with it, and go back to to farming with stone tools. Or, he could compassionately give away his combine to the village sloth who will allow it to rust and beg for food as the farmer toils away with stone tools. Or, he and his farmer neighbor could mount big guns on their combines and go to war, leaving both combines in flames and both farmers dead or disabled, and their widows to farm with stone tools.
In the real world is it not always as easy as in these idealized examples, to tell whether resources are wisely employed. Arguably the War on Drugs is an economically destructive policy, like setting the combine on fire, but plenty of people still disagree. The cultivation of mathematics and science throughout the ages, and the construction of electrical power and telecommunications networks in the 20th Century, are probably examples of better judgment.
The investment of resources into things that create value value and happiness for people, instead of destroying it, is vital to the success or failure of a society.
See also The Broken Window Fallacy (Wikipedia). The needless repaving of low-traffic, low-speed residential streets that seems to frequently occur in some of the more dysfunctional jurisdictions in America is a similar sort of waste. Even sadder when also you see major infrastructural bridges sitting covered in rust only a few miles away.
Good: concentration of wealth facilitates further creation of capital and value
(speculative) An additional problem with wealth concentration is the possibility of misallocation. When there are fewer significant holders of capital, there are fewer people in a position to make decisions about the allocation of resources. These individuals may not have the necessary talent, access to the information, or other qualities necessary to make the best choice on how to use capital. This becomes especially pronounced if capital is allowed to accumulate in dynastic families or an aristocracy. It results in the same problem that Hayek identifies with respect to Communism. The few people making economic decisions do not have access to the right signals or information that would properly inform their decisions on capital deployment. In Communism's case, this is because there is no free market producing price signals that can guide decision-making. In the case of extreme concentration of capital, the free merket, while operative, is impaired. Many individuals are unable to meaningfully participate in the market because of a lack of resources. Price signals are produced by the activity of a small economic elite, and become distorted.
Additionally, economic decision-makers in a concentrated economic system become risk averse, interested primarily in maintaining their economic or social position. Because wealth is already concentrated, holders of econoomic power have less of an incentive to take on risk and deploy resources in a way that maximizes growth.
For an extreme version of some of these problems, consider cases like Zimbabwe, several of the former Soviet republics, The American South prior to and in certain regions after the Civil War.
The Tyranny of Past Decisions
See the Wikipedia article on the Tyranny of Small Decisions
A specific case is artificially low interest rates causing underproductive allocation of capital. A project only needs to make more than its cost of capital to be profitable. So if a project that only makes 1% can be financed at .5% then somebody will probably take it. However because of thermodynamics this will in general involve irreversible commitment or use of some physical capital in the real world, which cannot be un-done if a better project comes along.
The Broken Window Fallacy
Wikipedia, Parable of the Broken Window
The Rising Challenge of Ecological Sustainability
As of 2017 February 18, the 3 warmest years on record, in order, are 2016, 2015, 2014. 4 of the 5 warmest years on record are since 2013. 11 of the 12 warmest are since 2000. See NOAA State of the Climate.
Long-lived pollutants may be an even greater threat to life on earth than climate change. Humans have created radioactive isotopes that never existed in nature, some of which will decay for billions of years, about the practical life of the solar system. Humans have also created many Persistent Organic Pollutants which are resistant to breaking down in the ecosystem and therefore continue to do harm for long periods of time.
Unprecedented Need for Cooperation of the Whole Species
The overpopulation of the Earth, and the production of increasingly powerful weapons, requires humanity to cooperate in ways where heretofore it competed.
Throughout history both the struggle for survival against nature and the competition among tribes and nations has made humans increasingly efficient at exploiting the Earth to build weapons and infrastructure. Until now this has been a competitive advantage deciding the survival of civilizations, and it has not been necessary for the survival of the species for humanity as a whole to cooperate rather than compete.
However the logical end result of ever-increasingly powerful weapons and ravenous exploitation of the Earth is a destroyed ecosystem and an extinct species.
These ecological challenges require humanity to adapt in a way that it has never had to before, and its ability to meet that challenge will be key to the success or failure of the species from here forward.
Some Ecological Problems are Overpopulation Problems
There is a qualitative difference in ecological harm between releasing carbon that the Earth can reabsorb in its natural cycle, vs. creating persistent organic pollutants or radioactive isotopes that never existed in nature and will outlive the solar system.
Nature starts fires with volcanoes and lightning and reabsorbs the carbon with plants. The damage humans are doing with carbon is because of the enormous scale of their activity.
Although we don't know exactly what the number is, the Earth has some finite carrying capacity, a maximum amount of life the ecosystem can support. Because of their success as a species the humans have reproduced rampantly enough to call that limit into relevance.
It is imperative humans find ways to control population growth consistent with freedom and human rights. Some countries already have their population growth under control, but some don't.
People (mostly) behave rationally and in response to economic circumstances and incentives
Wherefore all policy must be set with this in mind.
Given the foregoing observations on how economics follows from the law of nature it is no surprise that people behave economically: they wouldn't be here if they didn't.
Sociological and Political Factors
Literacy and Education
Literacy is essential to a society both economically and culturally.
Economically it is impossible to construct or utilize any but the most rudimentary physical capital without literacy, both to learn the knowledge acquired in previous generations and in the design, construction, and use of capital by augmenting a humans' "working memory" with extra and more permanent storage (imagine a computer with 640 kilobytes of RAM and no hard drive, vs lots of RAM and a big hard drive).
Just as literacy connects people with all humanity's previously acquired scientific knowledge, likewise it connects people with all history's lessons about how people should or shouldn't treat each other and their ecosystem and about what makes societies succeed and fail.
Without literacy humanity is stuck in "Groundhog's Day", having to re-learn the same shit and make the same mistakes every generation. With literacy we can lessen the Groundhog's Day effect at least some.
Toxicity of Ignorance via Lowered Expectations
Soros (citation needed - might have been Soros on Soros, interviews, lectures?) may have been the first to recognize this idea, in the context of people believing in flawed economic ideas and therefore also believing that the results they were experiencing were the best possible under the circumstances, when instead with more aware and enlightened policy standards of living would be much higher and levels of misery much lower. More recently Jamie Dimon implied flawed and backwards policies (which society apparently believes in, since they are law) are responsible for meager economic growth which could be much better, see quote reprinted here
By analogy when people thought the Earth was flat they were scared to sail around it, not just because of the dangers intrinsic to sailing but also because they feared they might sail off the edge into some existential abyss. Magellan could not make sailing inherently safe, but by demonstrating in experience what many had already begun to conclude through reasoning, he at least removed the fear of the existential abyss and opened the world to navigation and ultimately improved standards of living.
"We must, indeed, all hang together or, most assuredly, we shall all hang separately." -Ben Franklin
"Ask not what your country can do for you, but what you can do for your country" -JFK
Cultural Willingness to Set Policy Pragmatically vs. Upon Traditional Views or Emotional Reactions to Events
You can't sail ass-end-first into every storm and expect to keep the ship afloat.
Topic page: Elements of Leadership
General Self-Destructiveness of Oppression
In his Brandenburg Gate speech Ron Reagan spoke of "the practical importance of liberty".
Reagan was an ebullient, idealistic, intrepid blunderbuss of optimism. Some of his policies were as spacey as Star Wars, but culturally he got America believing in itself again after a demoralizing experience in Vietnam. What kind of message did it send to everyone from the American worker to the Soviet leadership, when after being shot in the lung and having every right to step down from office, he got back up on the podium and spoke to the world believing balls to bones in one of the greatest truths about the way societies succeed and fail?
Freedom will win in the world because freedom makes societies healthy and successful and oppression destroys them from the inside out.
Reagan saw the pattern in the contrast between the prosperity in the relatively free West and the dysfunction in countries that were stifling free press and speech and commerce. But the pattern is so comprehensive and powerful that it is evident in many more and different examples, ironically some of them Reagan might have hated to admit.
Denver, Portland, and Seattle have shown recently, and Netherlands has shown since the 1970s, that the sky does not fall if you let people smoke weed, you will rake in tax money hand over fist, save a ton more money not persecuting and prosecuting and incarcerating people, keep big money out of the hands of organized crime, and everyone will keep coming to work and doing their jobs every day.
Anyone who has seen the situation on both sides of the pond will say that prostitutes in Netherlands or Germany are safer and less miserable than the ones in Chicago or New York. Where it is legal it is the world's oldest profession; where it is illegal it clogs courts and jails with nonviolent people just mostly trying to ease their own suffering in their respective situations.
And by foisting upon people the risk of suffering in failing health and disability at the end of life, instead of allowing assisted suicide or euthanasia to anyone who wants it to ensure they don't suffer, society only incentivizes people who are "on the fence" to kill themselves while they still have control of what death will involve. Many or most of us know at least one person who killed themselves, and are now no longer here to help us. Probably fewer of us understand all the reasons why they did what they did. But society's blind and irrational approach to the inevitability of death that comes for us all, gave them an important, rational, and meaningful risk management reason to die, that they never should have had - instead of tilting the incentives toward seeing one more day. I wonder how many good minds and hands we would still have with us if the law was not so stupid about this.
In almost every case, example after example, the pattern is that freedom works to strengthen societies and oppression works to destroy them.
Special Case: Freedom of Information/Press/Speech
If people can't tell the authorities what is wrong with a policy, the authorities will probably keep doing the wrong thing.
If people are underinformed or misinformed, their advice will be useless or misguided.
In either of these situations there will be few minds running the society instead of many.
No surprise that the societies that suppress freedom of information the most, also tend to be among the most dysfunctional and miserable, and the societies where people are free to collect information and criticize policies and leadership and protest for reform, lead the world.
Because of its role in setting policy, freedom of information is also one of those freedoms that is foundational to all the others.
Special Case: Economic Freedom
"Capitalist" vs. "Communist" experiments of the 20th century.
Maybe the complexity of central planning scales faster/worse than linear with the size of the society?
Political System Design and Balance of Power
Concentration of Power
"Power corrupts" - and also by its nature power is leverage with which to get more power. A well-designed political system is a stabilizer against the natural trap for the people in power to fall into, a vicious cycle of doing all kinds of evil and stamping out liberty in order to keep power and cover up their misdeeds.
The people who work and create the value, have to have the power, lest they be enslaved and society's resources be diverted to the idle pleasures of the slothful
Policy Lessons, Experiments, and Questions
Literacy and Knowledge
"Education with ROI" is a societal priority
Given student debt levels and the amounts society spends on education the "with ROI" part is important. "Abraham Lincoln learned on the back of a shovel." -Bob Auler
Separation of church and state
When everyone has their own personal religious views, and in general none can be proved or disproved by experiment, setting policy on religious bases contravenes the societal precepts that (1) we are all "created equal"; and (2) we ought to set policy according to what we have learned from experience and experiment and thinking rationally with the brains GOD gave us. Religiously motivated policy arbitrarily imposes the thinking of some upon all, and in many or most cases also makes for maladaptive policy premised in traditional views instead of the results of experience.
Political System Design
Direct Election of U.S. Supreme Court Justices
The Court is unable to act as an effective check on abuses by the other two branches, when the other two branches decide who is on the Court. The other two branches are unlikely to put people on the Court who will restrict their power.
U.S. history has seen an almost monotonic increase in federal power to the point where it is now "constitutional" for the federal government regulate individual behavior choices far attenuated from Washington. It is inconceivable that, for example, whether someone dying of cancer grows a pot plant and smokes a joint in the quiet of their home, should somehow be a matter of federal concern or "interstate commerce". Historically FDR's Court Packing Scheme is direct evidence that the Constitution does not adequately protect the Court from undue influence from the other two branches.
Proposed Amendment: Judicial Independence Amendment
Parallel Legislative Power in Popular Referendums and the Elected Legislature
Tax Ecological Harm not Created Value
Taxes affect behavior by shifting incentives: they raise the costs or reduce the revenues involved in doing something.
The income tax discourages the creation of value by reducing the reward involved in it, and is agnostic to the means of creating the value, and therefore agnostic to the amount of ecological harm done in creating the value.
We should not want to discourage creation of value, and policy should not ignore ecological harm.
The income tax is a system of incentives aiming for minimum value creation and maximum ecological harm.
For these reasons the income tax is an abomination.
Taxing pollution and ecological harm does not discourage creation of value, but does incentivize means of creating value that minimize ecological cost. The result is maximal economic value with minimal ecological harm.
Moreover because any economic process is going to produce some kind of waste - this is ultimately true because of thermodynamics - there is no concern about an inadequate base for taxation. Indeed because of this thermodynamic reality the base of taxation would be at least as great as when taxing income, just that the tax would fall on the harmful side of the activity not the helpful side. Processes that destroy instead of create value (think of a business constantly losing money and selling more shares and reverse-splitting its stock to keep the price above $1 or $.01) are still taxed when ecological harm is taxed, but when only income is taxed they are not taxed because there are no profits.
Use the Estate Tax to Offset Natural Concentration of Wealth
The Death Tax is the only tax you never have to pay!
Moreover because inheritance is only a transfer of wealth with no newly created value, the death tax does not punish the creation of value like the income tax in general does.
Issues of Basis of Taxation and Distributive Justice are Separate and Distinct
Although unless the situation is to chance it is in the first place questionable policy to intentionally and artificially sustain any thing, living or not, that does more harm than good to the ecosystem in total, nonetheless to the extent people might object that the taxation of pollution and "entropy increase" (connotational not rigorously mathematical meaning of "entropy increase" here) is a regressive tax - true but irrelevant, on the basis that any portion of the total tax receipts could be distributed arbitrarily to offset any inability to "pay one's fair share".
In other words, picturing/analogizing the policies and incentives and receipts and costs in terms of graphs, taxing created value vs. ecological harm differs fundamentally in the "shape of their curves" whereas redistributing a "translational" $X of wealth per person who cannot "make their board" leaves the "shape" of the taxation system's "curve" unchanged while only linearly shifting the "break-even point of zero profit-or-loss".
Fair Trade not Free Trade Among All Nations, with Tariffs not Tax Breaks to Level the Playing Field on a Country-by-country and Market-by-market Basis
150 Years of the U.S. Powering Up its Economy While Raking In Tariff Revenues Show Protectionism and Trade Not Mutually Exclusive
The rise of the U.S. economy from the nation's inception through World War II is well known in history. Less well known, is that all the while, America was raking in tariff revenues from international trade, see Wikipedia article compiling historical U.S. tariff data. Anyone thinking you can't protect and grow your industrial economy with reasonable tariffs, and still have healthy international trade fostering globalization and peace, is stuck in a false dilemma.
Individual Behavior, Freedom, Easing Suffering, and Promoting Human Rights
To what ends do we construct organized and hopefully intelligent societies? Is it about ensuring survival of the ecosystem and the species, or in addition to that is it also about how its individual members feel every day? To the extent anyone is still miserable and suffering, did it really accomplish anything, or for those people is it mostly just an empty victory?
If we are all "created equal" then who is one person to tell another what they should or shouldn't do - especially about easing their suffering or addressing the inevitability of death we all unfortunately share? Who is somebody else to say how much somebody is suffering or what will help, or what GOD will think of this or that?
Finally as discussed in the section on the Nature and Causes of the Strength of Nations, in many or most cases the prohibition of what people are naturally inclined to do causes way more harm than the underlying behavior.
For these reasons, and others unique to the specific freedoms, we seek the following freedoms to ease people's suffering, and in some cases open up to them enjoyable or beneficial experiences they would not otherwise have.
Right to Assisted Suicide / Euthanasia
Legal status (Wikipedia)
Proposed Legislation: Assisted Suicide Rights Act
Legalization of Prostitution
Legalization of Drugs
Restoration of U.S. Citizens' Access to the Global Online Poker "Market"
Operational Manual for Construction of Civilization Out of Ignorance in the Jungle
The idea of this guide is that if even one person in a village in the jungle can read then that community can start working meaningfully and step-by-step toward building a fully functional society. Starts with basics like survival and first aid and building shelter and goes step-by-step in a functionally logical order progressively up through all the shit we know like smelting metal and building machines, on to contemporary technologies like MRIs, immunotherapies against cancer, fiber optics, and packet-switching networks.
Seems like something that ought to already exist at somewhere like the UN?
Starting point: US Army Field Manual, Survival
Daily database dumps of this site are at https://strengthofnations.org/wiki/dbdumps/.